Solv Protocol Has Introduced SolvBTC.AVAX, a Token That Links Bitcoin to Real-World Asset (RWA) Yields

Built on Avalanche, the product allows users to earn returns from traditional financial instruments while holding BTC on-chain.

Solv Protocol has launched SolvBTC.AVAX, a token that links Bitcoin to real-world asset (RWA) yields on the Avalanche blockchain.

The product, launched in partnership with Elixir and Euler, allows users to earn returns from traditional financial instruments while holding BTC on-chain. Users can deposit BTC.b or SolvBTC and receive SolvBTC.AVAX, gaining exposure to tokenized assets like U.S. Treasuries and private credit through Elixir’s deUSD stablecoin.

Capital is channeled into yield-generating positions using an automated strategy managed by Solv, which also handles token rewards. This integration aims to transform Bitcoin from a dormant asset into a productive one.

The initiative taps into a broader trend in crypto: the tokenization of traditional assets. It uses a structured system to bridge Bitcoin with real-world finance, positioning BTC as a gateway to more stable, regulated returns.

Real-World Assets Cross $22 Billion, Institutional Demand Grows

Data from rwa.xyz shows that tokenized RWAs now exceed $22 billion in on-chain value. Since mid-2022, this figure has risen sharply, with the most significant growth concentrated in private credit and U.S. Treasury debt.

Key contributors to this expansion include BlackRock (NYSE:BLK) and Hamilton Lane (NASDAQ:HLAN), who have supplied billions in tokenized securities, positioning them as major players in the emerging field of RWA tokens.

U.S. Treasuries have become increasingly integrated into on-chain protocols due to their low-risk profile and compatibility with digital finance infrastructure. Their presence in decentralized protocols signifies the increasing trust in institutional-grade instruments.

This shift showcases the growing interest in linking blockchain technology with legacy markets. RWAs, known for their predictable returns and operation under regulatory oversight, are appealing to both institutional and crypto-native participants seeking diverse yield alternatives.

Modular Protocol Stack Powers BTC x RWA Integration

SolvBTC.AVAX is launched through a coordinated system of five decentralized protocols on the Avalanche network. Solv handles strategy automation, compounding, and reward management for the vault, while Avalanche provides the primary execution layer, recognized for its speed and low fees.

Elixir is crucial in minting deUSD, the stablecoin backed by tokenized traditional assets, which is used to generate yield. For efficient capital looping, Euler plays a role in integrating with Solv and Elixir. Finally, LFJ and Balancer are the main liquidity protocols where capital is deployed, with swap fees and emissions contributing to returns.

Each component serves a distinct function, ensuring a fully decentralized and scalable system. The vault structures its yield process around deUSD. The deposit of BTC triggers the minting of this stablecoin, which is then cycled through lending and farming protocols on Euler. Profits from these activities are automatically compounded back into the system, which is reflected in the increasing value of SolvBTC.AVAX.

Avalanche Selected for Low-Cost Infrastructure

Avalanche is selected as the chain for SolvBTC.AVAX operations due to its composability and speed in supporting DeFi applications at scale.

The chain is known for low network fees and rapid finality times, which are crucial for real-time capital movement in advanced yield strategies.

SolvBTC.AVAX joins a growing list of financial primitives being deployed on Avalanche, ranging from stablecoins and derivatives to advanced capital management systems. The platform’s structure accommodates modular systems like Solv’s, which require coordination between various smart contracts and liquidity layers.

By leveraging the Avalanche ecosystem, Solv gains access to tooling and integration options for expanding the vault’s capabilities and streamlining the integration of new yield opportunities. These features help maintain transparency and decentralization.

Unified Strategy Offers Layered Rewards

SolvBTC.AVAX incorporates a triple incentive model. Users will receive AVAX-based rewards from the vault, paid out proportionally to their SolvBTC.AVAX holdings.

Additionally, they earn Elixir’s Potion Points with every use of deUSD, and Season 2 Points from Solv are awarded for participation in the vault strategy. Each incentive mechanism is intrinsically linked to a different layer in the overall strategy stack.

This encourages engagement with multiple protocols and provides a built-in reward cycle that compounds alongside the vault’s yield generation activities. All processes are automated. Users only need to hold SolvBTC.AVAX to gain exposure to the underlying assets, farming opportunities, and ecosystem incentives.

This streamlines access to yield without requiring users to personally manage each protocol or liquidity layer individually. It positions SolvBTC.AVAX as a single point of entry for participation in this multi-protocol strategy on a modular chain like Avalanche.

Shift Toward Productive Bitcoin Finance

The release of SolvBTC.AVAX marks a significant shift in how Bitcoin can interact with financial markets. Backed by over $4 billion in tokenized assets, it showcases a model for transforming BTC into a yield